DoubleVerify Misses Revenue Guide as Growth Slows
Revenue fell $5.2 million short of the company’s previous guidance floor.
DoubleVerify Holdings (DV), the advertising-verification software company, reported second-quarter revenue growth of 3%, slowing from 10% in the first quarter.
Revenue rose to $193.8 million from a year earlier and increased 7% sequentially from $180.8 million. Diluted earnings rose to $0.08 a share from $0.05 as net income increased 48% to $12.9 million.
The slowdown extended across DoubleVerify’s two largest businesses. Activation revenue declined 1% to $107.7 million after growing 6% in the first quarter, while Measurement revenue rose 6% to $66.8 million following 16% growth in the preceding period. Supply-Side revenue increased 13% to $19.3 million, roughly sustaining its first-quarter pace.
Profitability strengthened despite the softer sales. Adjusted EBITDA rose 14% to $65.3 million, and the adjusted EBITDA margin widened four percentage points to 34%. Operating income increased 70% to $23.0 million, lifting the operating margin to about 11.9% from about 7.2%.
Quarterly free cash flow increased 64% to $65.7 million, with conversion reaching 101%. The first-half picture remained weaker: free cash flow declined 17% to $59.4 million as operating cash flow fell and capital spending increased. DoubleVerify ended June with $210 million in cash, up from about $174 million at the end of March, and remained debt-free.
Following the Nielsen acquisition agreement announced Aug. 6, DoubleVerify withdrew its previously issued financial guidance and suspended future earnings and investor calls while the transaction is pending.
The company also stopped reporting growth in Social measurement, International measurement and connected-TV media transactions, which had risen 23%, 18% and 28%, respectively, in the first quarter. Advertiser transaction-volume, fee and retention measures remained absent after fourth-quarter results showed media transactions measured up 8%, media transaction fees down 3% and gross revenue retention above 95%.